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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Indonesia 11, Europe 10, Us 10, India 6, Romney 5, U.s. 4, Pakistan 4, Cgi 3, Caterpillar 3, S&p 3, Obama 3, Britain 3, China 3, Clinton 2, Ameritrade 2, Apple 2, Warren 2, Africa 2, Jacqueline 2, Nicu 1,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    September 24, 2012
    4:00 - 5:00pm EDT  

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a lot of people got out of apple. it got pricey. doingle is pricey, too but it tells me this is a model that continues to work. android phones are still selling well. >> there's the closing bell. thank you very much. and the "closing bell" continues now with maria from the nyse. >> and it is 4:00 on wall street. do you know where your money is? hi, everybody, welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. if it's monday, you know the dow will be lower, i guess. today no expectation. the blue chip index closing lower for 15 out of the last 16 mondays. apple weighing down the nasdaq today, accounting for more than half of the losses at the nasdaq. investors disappointed after apple sold just 5 million iphone 5s in just a few days. some analyst predicted much higher results in three days. google set to close at a new
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high today. google and apple have made up 73% of the nasdaq 100's gains in the third quarter. a similar story all year. take a look at how we're finishing on wall street. dow jones industrial down 19.5 points. art cashin telling us earlier there were sale imbalances. 13,559 at the last trade on blue chip average. volume once again on the light side today on the heels of heavy volume friday with the s&p rebalance. s&p 500 giving up three points today, about 0.25, 1456. nasdaq gave up 20 points, to finish 3160. we're getting closer and closer to the election and more investors are concerned about a major market slide ahead of it. we're a week ahead from the always dangerous october. what are our next guests expecting? we get to our guests doug cody, wells fargo funds management margie patell, and rebecca patterson and our own rick s
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santelli. rebecca, you're looking at more than equities, in particular currencies. what's the latest out of europe and where you would be positioned? >> we do have some exposure to europe in our portfolios right now in the equity market but it's selective. it's companies that might be domicile in europe but where a lot of revenue is coming from outside of europe. we took advantage of the euro rally in the last week or so to hedge some of that currency risk back to benchmark. we have the european stock risk. we don't want to double down and have the currency risk as well. i think the rest of this year is going to be -- is going to be a tough ride. we have earnings, that's a risk. the election is a two-way risk. europe seems to be a perennial risk these days. we basically want to stay put and just kind of watch how things play out. >> all right. that's an interesting take. doug, what about that. they're sort of throwing the baby out with the bath water in europe even though industrial companies there, away from financials, away from the hot
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button sectors, seem to be growing earnings still. >> yeah, i think they are. you want to be broadly globally diversified in equity and fixed income, but i think you have to brace for some volatility. we've had 12 consecutive quarters of positive earnings. what i've seen over the past three months, we had contraction in manufacturing. i'm very interested in monday's number on manufacturing report and going forward because i think that's a harbinger for where corporate earnings will be in the near future, third quarter. >> are you worried about corporate earnings, third quarter? >> i am a little bit because manufacturing has rolled over. that's why it's very important for what i think the qe -- the fed qe program, i think they might have pushed growth forward so maybe manufacturing has a chance and maybe corporate earnings has a chance. but we'll see. >> yeah. margie, let me ask you about earnings versus this idea that deep pools of money are going to
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chase stocks going into year end. we sort of have a fight between the fundamentalists and in some regard a technical look at this market because a lot of people believe that, you know, deep-pocketed investors, pension funds, et cetera, institutions are going to be chasing this market because they've underperformed and they want to make sure they play catch-up. on the other side of the trade, you've got the fundamentals, which could be worrisome given earnings are expected to go negative in the third quarter. which side are you on? >> well, i think that we will see growth slow down for a lot of companies. and i think that stocks will be winners for the rest of the year, will be much more companies that truly have a growth path that can maintain their cash flow. i think that will be a smaller number of companies than we've had earlier this year because anywhere in the world it looks like growth is decelerating and high growers are going to be more limited in number. >> do you want to follow the high growth names even internally or are you just talking domestic? >> i'm looking more and more
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domestic in the u.s. because i think on a relative basis, our growth over the next year is going to look pretty good. we've seen developing markets dramatically slow down. and we've seen our growth, at least toe the line around 1.5%. many companies are very well positioned. they really are globally competitive. so, i think they have the ability to grow much faster, even with that slow economic backdrop of in those sectors that have the ability to control their own destiny and grow faster than the economy. >> you're talking about a lean and mean story when you look at corporate usa. rick santelli, what about that? does that change in 2013 because of the fiscal cliff issue? >> you know, as i start to list all these things that can change on december 31st, i know we're all okay, it will all work its way out. but it's such a long list. i mean, personal rates up to 39.6, deductions, exemptions, alternative minimum tax includes many more people, death tax, marriage penalty, capital gains from 15 to almost 24, almost
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triple of dividend taxes from 15 to 43, obama care taxes, higher taxes and fees. to me, even though most traders i talk to say somebody's going to cave, we're not worried about it. i think depending on how the election goes, november 7th could be one of the busiest, most wild days in the equity indices since the flash crash. >> yeah, it's going to be busy for sure. thanks, everyone. we'll keep watching the story of stocks. be sure to catch rebecca and the "money in motion" gang this friday, every friday on "money in motion" on cnbc. this market trying to shake off the monday blues. courtney reagan has been front and center at nyc. >> the dow closed lower for the 16th day. we popped briefly higher shortly after we saw the futures trading close over at the nymex but we couldn't hold onto it with both of those indices closing lower. if we take a look at some of the
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sectors, we're in this defensive mode. the effects of qe3 already waning. energies, material lagging. also technology. take a look at some of these technology movers because they have been notable. we've talked about apple with potentially supply and demand issues here. demand for the iphone 5 less than what some expected. the supply potential issues with that employee scuffle at foxconn. we're still sorting that out. pressure on pc makers as well with intel trading around a year-low. dell at multiyear low. microsoft also struggling. google closing at historic highs. moves we haven't seen in quite some time for this -- forever, really, as we're talking about google for an all-time historic high. also moving beyond technology. some of the pharma names. we saw the nyse acca pharma index hit a ten-day high. some big movers, pfizer,
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novartis, lily. >> thank you. we have much more ahead on the "closing bell." >> announcer: would you be willing to receive less from social security to help fix the nation's financial problems? that's what mitt romney is proposing. >> people with higher incomes won't get the same high growth rate in their benefits than people with lower incomes. >> announcer: is it time for americans to pay up for entitlements and will that end up costing him votes in november? plus, which defense companies will get hit the hardest if congress isn't able to avoid billions in spending cuts? details are ahead. and is it possible to solve global poverty and be prosperous at the same time? the head of one venture capitalist thinks so. the equity summary score consolidates the ratings
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welcome back. last night on "60 minutes" mitt romney was expressed for specifics on how he would close the deficit and save entitlements. this is what he said about medicare. >> we'll have higher benefits for low income people. and lower benefits for high income people. we're going to make it more means tested.
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i think if we do that we'll make sure to preserve medicare into the indefinite future. >> and romney said the same thing about social security. is means testing the way to go? obik roy, adviser to the romney campaign, david callahan says that's not the way to save these programs. david, to you first. the idea from romney takes away from the wealthy and boosts benefits for those with lower incomes who need it. you're against that? >> well, yeah. well, just to be clear, social security and medicare are two very different programs. it's hard to confuse them. look, you know, what romney won't say -- >> they're both going broke. it's the same idea. >> they both have financial problems. what romney will not say about social security is the obvious, is that we need to raise social security payroll taxes in order to deal with this solvency problems. that's the easiest way to deal with this. means testing is a big, big problem because have you to go through 56 million social security recipients and figure
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out how much money they make and verify that. that's a big administrative hassle. i don't think that would be a very popular idea. most americans would rather see higher taxes and keep benefits as they are than to cut benefits. >> yeah, so -- >> yeah? >> yeah. so there's, of course, two ways to really solve the entitlement problem if you get down to it. you can increase revenue by raising attacks or reduce the growth of spending in these programs. particularly with medicare, the math doesn't work by raising taxes because medicare spending grows at a faster rate than the economy. it grows at about gdp plus 2%. tax revenue overall, over time really can only grow at the size of the economy, at the rate of the economy. if you raise taxes, which depresses economic growth, you're going to get slower economic growth and medicare spending is still going to go up. yeah, in the near term you can have some sort of stopgap measure by which you raise taxes and in some limited window you help out, but long term the only
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way to solve the medicare solvency issue is to get the spending growth of medicare to reflect that of the economy. >> and i think -- i would agree with that, by the way. as i said, these are two very different programs. raising taxes does help social security. not so much with medicare. they're controlling that spending is crucial. the obama administration has made big strides in that regard with the affordable care act lowering medicare spending by over $700 billion in the next decade. we know how to get health care spending under control. we need more time to let that affordable care act work as opposed to repeal it, which is what romney would do, and that would add billions to medicare cost in the next decade. >> doesn't it add an expense somewhere else? i mean, businesses are complaining about the expense of the affordable care act. they're complaining about the expense of the whole health care legislation. >> well -- >> i'm sorry, go ahead. >> we have 40 years of experience with government-centered approaches to try to reduce the growth in
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medicare spending. we instituted price controls. we've instituted forms of rationing, obama care. aggressively institutes rationing approaches or rations organizations and structures into medicare. but we've tried this. and it never works. in europe where, like in england, for example, in the uk, they have aggressive government rationing. the growth in health care spending on an annual basis, on a per annum basis is the same -- actually it's higher. the way to reduce growth in medicare spending is to give seniors control of their own health dollars. you'll be a lot les wasteful and the government will be controlling the same money. >> just to be clear, most of western europe spends half of what we do on health care and they have government-controlled systems. obviously, this is the key to controlling health care costs. >> that's not true. so, again, the rate of growth of spending in europe is the same if not higher. the u.s. is below average in the oecd.
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we started on a higher base. that's because medicare in the '60s dramatically increased the amount of money we were spending on health care in a way that didn't make a lot of policy sense because it was poorly designed at the outset. those are the kind of reforms that will help atenuate the growth of health care spending romney is planned. >> we appreciate your time tonight. thanks very much. >> good to be here. what happens in britain may not stay in britain? uk tax authorities are widening the reach of their so-called affluent unit. it's targeting people with assets of 3 million pounds, $2.4 million, including the value of their homes. robert joins us to tell us whether this is paying off. >> british authorities have hired 100 new tax investors. they were targeting people with 2.5 million pounds before and now they're broadening their
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reach. the results from these special units have been mixed. if we look at the u.s. experience, the irs has only collected 4$48million over the past 2 1/2 years and only done 36 audits, with a staff of over 100 people. the irs says it's working on far more audits, perhaps hundreds, but these are very time-consuming since the taxes of the rich are so complicated. the full results are not yet in. britain would not give me a total for their affluent unit. investigating the taxes of the rich may be as much about politics, maria, as it is about real revenue. >> yeah. good point there, robert frank. jane wells with news on stolen artwork. >> gunlock just held a news conference in los angeles, head of double line capital says he's
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upping the reward for more than a dozen rare paintings stolen from his house in west l.a. earlier this month. he had earlier offered $200,000 for information leading to the safe return of this. he's now upped it significantly for specific paintings. here's what he had to say. >> $1 million for the undamaged return of this picture by piet mundrian, successfully undamaged. in addition, i'm offering a $500,000 reward for the successful return undamaged or information leading to the successful return undamaged of this work by jasper johns called green target and these two artworks by joseph cornell. >> award money now totals $1.7 million for the successful and undamaged return of painting from gundlach's home.
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$5 million were stolen from his house, including a red porsche, watches, but it's the artwork he's most fond of. we asked if it was insured. he would not comment. he only said about the investigation they're looking at, quote, a couple of avenues and they're hopeful. >> thank you so much. let's go over to jackie d'angelo with a market flash after the close. >> watching shares of caterpillar as you mentioned in after-hours session, they're trading lower because the company has cut its 2015 earnings forecast, citing weak economic conditions around the world. now we're looking at a range of $12 to $18 per share in 2018, against a previous forecast of $15 to $20. we were down 80 cent at close and in the after-hours session, down nearly $2. red alert. the money you're saving for your children's college education could take a hit from massive changes in income as state and gift tax laws. it's all triggered by the
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looming fiscal cliff. and then with hundreds of billions in defense spending cuts in the offing, i'll talk with a defense analyst about how that will impact your portfolio. the impact could be wider than you think. indonesia front and center in those anti-american protests stemming from the controversial film portraying prophet muhammad in a negative light. we speak with the president of india next.
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welcome back. all eyes on the looming fiscal cliff when the combo of tax increase and spends cuts go into effect january 1st. half of the $1.2 trillion in automatic cuts will come from domestic spending. with the other from the pentagon. so, what would that mean for defense stocks? we bring in michael lewis of lazard capital markets. out with a new report today saying the trigger will have a devastating impact on the industry and national defense. thank you for joining us. >> thank you, maria. >> i was really interested in reading this report because we know that the defense companies are front and center in terms of companies that will lose federal dollars, when the spending programs go away. what are the consequences? >> it's certainly true. really major consequences, jobs. there's going to be a risk to many thousands of employees being cut. we're going to see the industrial base for defense really significantly impacted. at the end of the day, it's not going to be good for the
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companies as they try to run their companies with less money. >> they have to tell their employees if they're going to cut workers by october 1st, right, the defense companies? >> in fact, it's november 2nd. it's the warren act. >> november 2nd, okay. have we heard of the announcements yet? what are you expecting in terms of layoffs? the defense business? >> i expect larger prime contractors will step up and issue warren notices. i don't believe some of the smaller firms would do it because they will feel that they could be -- there could be negative implications if the sequestration did not occur. i'll tell you already we're starting to see small warren act notices coming out. gd put one out, general dynamics put one out a short while ago for 40, 50 employees. they're coming but you'll see more come toward the election. >> if this happens, does the president and congress have options in place to lessen the
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impact on the defense industry? >> unfortunately, and you've interviewed so many congress people, you realize that there really is -- there is a partisan issue. there has been no reconciliation between the house, senate and the republicans and democrats. so there's no real answer on getting the sequestration issue solved. the debt reduction is not on the table right now. i certainly don't believe we'll see implications or a resolution before the election. and, in fact, the only way i see the sequestration coming offline and not being a target any longer is with a full republican sweep during the election. >> yeah. i mean, you know, we've already heard from a handful of transportation companies. apparently we got also caterpillar lowering 2015 guidance, which we'll get to in a moment. are you expecting, you know, downgrades in terms of these companies coming out and saying we are going to be lowering our growth expectations? break it down for us. which companies are most
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effected by this trigger. >> the most impacted companies within my coverage fall within the government services space. they include mantac international, cic international and booz allen and hamilton. the least impacted companies include boeing, fleer systems and harris corporation. and as you'll note, the least impacted firms have more product in the portfolio. most impacted companies are more services-oriented. >> so, these are the least effected. so, who's most? i mean, you know, we saw fedex come out and lower guidances, a handful of big companies that are surprising investors. caterpillar for one just a few minutes ago. are you expecting more of that? >> implications on the defense side are going to be more macro-related to the funding profile from the budget. and i do expect that you will see, as we move into a calendar year '13 guide, that the
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expectation will be set lower than what the current estimates are calling for. now, will we necessarily see across the ocean downgrades of the stocks? i probably don't think so because these are stocks that are already trading close or at multiyear and multidecade lows. so, what's the real downside? well, there will be a significant revision in the multiple on the news of a sequestration. but i think there will be immediate buying thereafter and you'll see a lot of investors that have avoided this space for the last two years, coming in aggressively and buying this space based on the low valuations and the great risk return. >> well, you speak to these ceos in the defense business a lot. what are they telling you in terms of their plans to lay off? >> they won't -- they will not make commentary with regard to potential layoffs. now, we cued all of our research coverage and we specifically addressed how we're running these revenue reductions, what
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the implications to the employee work force would be. most of the companies would not respond to that. so, what you see there is probably a best guess of the implications. like i said, you're talking about 26,000 to 39,000 employees. that's 4% to 6% of the work force. at the end of the day what's going to make congress get this thing moving is they're going to see the jobs and the money coming out of their districts and there's nothing that gets congress working faster than people losing their jobs in their congressional districts. >> when does this start hitting the fire? november 2nd? >> actually, the warren act implications will hit november 2nd. the sequestration trigger takes effect january 2nd, 2013. that's when you'll see it happen. >> we hope you come back to talk about it. good to have you on the company. from defense companies to your child's education, why saving money for your child's education may get trickier.
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we'll help you navigate the mess in a few minutes. could recent protests in indonesia over an anti-islam film hualt the growing economy? later on, ultruism and the stock market. her fund strives to make money. we're sitting on a bunch of shale gas.
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welcome back. market flash right now. >> shares of red hat are lower. company reporting second quarter numbers after the close today. revenues were $323 million, slightly better than consensus but that eps of 28 cents, it missed by a penny, profit falling 12% in the quarter as the company struggled with higher operating costs. take a look at the chart there. we're down 2.85% at 55.88 at this point. >> thank you so much. indonesia has the largest muslim population in the world. that nation has been a flash point for the anti-american protests in response to the controversial film about
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prophet muhammad. i sat down with the president of indonesia. >> tell me about this. our audience wants to know what's behind this demonstration and embassies, protesters throwing rocks at embassy in jakarta and other large cities. what's being done about it? >> i think everybody knows there is a problem. and i should say the relatio relations -- relation between religion, it happens not only in indonesia but in many worlds. lesson to be learned is we have to learn how to live together harmoniously by respecting other faith, other values, other beliefs. we could do that if all leaders and the global community work together to build harmony among
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civilization and to avoid the so-called civilizations. >> you make important points and i know you'll be talking about this at your speech at the u.n., particularly as it relates to the film we saw. you said that that film was demeaning to islam. indonesia, of course, the largest muslim population. here we are at the new york stock exchange, probably the epitome of free markets and capitalism. you also said that if such things were allowed to continue to happen, there would be conflicts around the world. do you suggest that the united states should curtail free speech? >> well, i would like to say in this way of where there is free speech, there is a human right. and i started the declaration of
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human rights but there is limit in exercising human right for all people, all nations. >> are you going to ask president obama to change his policy in any way on free speech? >> i don't think -- i'm not in a position to lecture any leader on this matter because one thing that i believe all leaders can take many lessons from what is happening worldwide, including the last incidents about the -- i incidents of anti-islam films. >> you have investors watching. indonesia, the 16th largest economy in the world. gdp of $850 billion. it's really been one of the bright spots in the emerging markets in this global slowdown and a new mckenzie report is predicting the economy getting to the seventh largest by 2030. what can you tell us in terms of your expectation for economic growth next year and in the coming years? >> well, i am pleased to say
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that even though we are facing global economic recession, but indonesia is able to maintain our positive growth. we expect to achieve around 6.5% growth next year. and with that what we need is a sustainable growth in the years to come. >> so, what is your sell, if you will, to foreign investors? you'd like to see foreign-direct investment rise in indonesia. why should investors put money to work in your country? >> well, i have to convince them that they will have a good reason by doing investment in indonesia because we do our homework, we improve our investment climate, we built in more infrastructures and we offer a lot of opportunities in
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various economic cooperation across the country. so, those things i would like to convey to our partners and investors abroad, including today. in this place. >> the president talked about consumerism and the consumer class rising as one area of growth. you can watch the full interview with the president of indonesia on cnbc.com. college savings on the fiscal cliff with big change in income, gift tax afoot. we'll help you make sure your college savings stays on track. venture capital on the front lines against poverty. we'll talk about revolutionary business model to help local entrepreneurs help others. don't miss a rare interview with the ceo of twitter, dick costolo. you're watching the "closing bell" on cnbc. [ male announcer ] the markets keep moving.
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copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. welcome back. is it possible to be profitable and still help save the world? the ccuman fund is hoping it can. focused on bringing affordable health care, water, housing and energy to the poor. so far those companies have helped to create close to 60,000
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jobs and have brought basic services to tens of millions of people. what's the story behind this effort? joining me right now is the accuman founder and chief executive, jacqueline. thanks for joining us. >> it's good to be here. >> what's the goal for the fund? why should investors be part of it? >> well, the goal is to change the way the world solves poverty. investors should be part of it because we need new systems for how to build businesses that serve the poor, where markets traditionally have been broken and governments have failed to go. >> so, you have a partnership with dow. dow chemical just announced. tell us about it. >> yeah, we're excited to work with dow corporation as part of our cgi and their cgi. when nobody was getting clean water in rural areas in india,
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they came in and experimented if you looked at low income people as potential customers. took a really long time to figure out what on it would take to market, to distribute in a way that people valued and could afford and dow's been part of that journey with us. n now water health insurance has raised $70 million in traditional capital, reaching hundreds of thousands of people, brought the model into west africa and that's just one indication of how these companies work and why patient capital is so important. as part of the cgi commitment, dow will work with acumen fund to bring its expertise, its skills, not just financial support, to companies with whom we work in africa. and we think bring real change to those companies as a result. >> how do you choose what to invest in? i mean, you know, with some of the political and policy obstacles you've got to face when you invest in certain countries whether it be, you know, countries in africa or in
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india, pakistan. tell us how you choose the investments you'll take on. >> so as i said, we go -- we find those entrepreneurs in many ways that are going into places that people feel are impossible. a guy like pondi, who when he heard that 65 million people in behar, india, were declared impossible to reach by electricity by conventional means, decided to take it on. we saw in him not only the engineering expertise and entrepreneurial drive, but the determination to actually build a business model that over time we could invest in and now serves not only hundreds of thousands, but has proven a model for how government can now get involved in bringing energy to the poor. these are in far-flung rural areas. this summer when 600 million people lost the -- lost their electricity from the grid, these villages in the most remote parts of india were sparkling
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with energy that people paid for with their own money on a regular basis because we could find an entrepreneur that was able to do it. >> it's extraordinary, actually. we wanted to get your reaction to comments made just moments ago by secretary of state hillary clinton on taxing the rich. what she said just there at cgi. listen to this. >> one of the issues that i have been preaching about around the world is collecting taxes in an equitable manner. especially from the elites in every country. around the world, the elites of every country are making money. there are rich people everywhere. and yet they do not contribute to the growth of their own countries. >> what do you think of that, they don't contribute to the growth of their own countries, jacqueline? >> i think there's a huge opportunity today to real
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possibility for hopes in these country. secretary clinton is right that we need to see all of us contributing, whether it's through taxes and through giving. in pakistan we've raised about $1.5 million this year for the work in pakistan. another thing secretary clinton said was that dignity and freedom are what sustain. and i believe that by building these economically viable models, where governments and markets haven't gone, we actually can show a way to an economy where everyone needs to contribute more. and it's by seeing that things can work in pakistan n india, in uganda, tanzania, nigeria, where we work. we're starting to see a ground swell of philanthropists, citizens that want to be part of that change. and the world really is in a place where we need to see the markets change, we need to see governments change, we need to see taxpayers change, all of us
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have got to be involved. >> yeah, i guess i was struck by they're not contributing to growth when, in fact f you have elites creating jobs, whether it's on the one hand paying taxes, obviously they're contributing, but just creating jobs and creating an opportunity for the folks who may not have a job be able to work. it's two different conversations but we wanted to get your take on it because it is important given what you're doing at the acumen fund. good to have you on the program. thanks. >> thanks so much. >> congratulations on that commitment. we'll see you soon. we appreciate it. >> i very much appreciate it. when it comes to making gifts, all the talk about the fiscal cliff can be confusing for parents, particularly grandparents who want to keep paying for a child's education. sharon epperson has more on ways to pay for an education tax-free in our "education nation" report. >> it is a big issue. the clock is ticking on tax rules that could change on january 1, 2013, impacting the way you can contribute to a
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child's college education. now, whatever the outcome on the tax laws, there are a few ways to lock in a tax benefit on gifts now. under the current law the amount of money you can give away over your lifetime without getting hit with taxes is a little over $5 million. you can take advantage of this exemption by creating a trust that will ensure that you would avoid a huge tax if the tax laws changed. now, when this current tax law expires, that 5 million plus dollar exemption is set to fall to $1 million in the new year. whether the current tax laws change or stay the same, you can always make an annual gift of up to $13,000 to a child. couples can give a combined gift totaling $26,000 tax-free. these annual income tax rules stay the same no matter what happens in the new year. you can make a lump sum of five years' of annual gifts in a single year, up to $65,000 a child, $130,000 a couple, without being taxed and you can put the money in a 529 plan which is designed to help you
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invest money solely to pay college costs. finally, you can just make out the check directly to the college. many parents and grandparents don't realize there is no limit and are no gift taxes when you pay the bill directly. if you pay the tuition bill, go straight to the office. you can find a lot more tips for paying for college at cnbc.com as part of our "education nation" series. >> great stuff. "fast money" begin at the top of the hour. melissa lee with a preview. >> top of the hour on "fast money" if you're like most money managers out there you might have missed the big market rally this year with one week left to go until the fourth quarter our traders will give you the catch-up trades for the last quart canner of the year. facebook slammed by barron's, slammed by goldman sachs triggering circuit breakers. and we have the man who says las vegas sands could be almost double if it breaks up into three companies, including two
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welcome back. our next guests will tell us what else they think will move the market tomorrow morning. forbes.com eric and american wealth management's lathe and kevin. eric let's kick it off with you. what are you looking at tomorrow? >> ecb president will be meeting. the key question in europe is whether or not spain would ask for a bailout. with little data due out of europe we are focusing on the key technical level which is the 200-day moving average. and u.s. consumer confidence is expected to rise. the manufacturing survey may join other surveys in showing a slow down. >> what do you want to look at
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tomorrow? >> today we saw small caps and mid caps outperforming large caps. we think that trend would bode well for the market and into the market election. we have seen pullback in gold which is creating a buy opportunity. due to a tremendous amount of political unrest in the middle east. consumer confidence tomorrow morning an uptick would bode well for spending in the holiday season. >> kevin to you. 30 seconds. >> with the report on prices coming out i think that will provide further credence that the housing recovery continues. consumer confidence i don't think as bad as some are predicting but i think it will point to a consumer that is still somewhat fragile given uncertainty. the fed speaking tomorrow about economic growth. we think it will remain around
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the 2% level if not lower. >> we'll leave it there. we appreciate it. great to stick to time and very good points that we'll be watching for tomorrow. my thoughts on fixing the education system in our country up next. back in a moment on ""closing bell."" everyone in the nicu, all the nurses wanted to watch him when he was there 118 days. everything that you thought was important to you changes in light of having a child that needs you every moment. i wouldn't trade him for the world.
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and finally today my observation on fixing education in this country. we all agree it is about the kids and the quality of education and good teachers. and yet the dropout rate is rising. every statistic and study demonstrate that a college degree is needed to truly thrive in the country. our education system is behind the times. ceos call this program all the time and say they cannot hire the people they want to because they do not have the skills required for the job so they are forced to hire from abroad. this is an economy that is more about technology, service focus and is globalized. what is stopping us for empowering our students to ensure that they can compete.
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in businesses you hire the best most talented people and put them on your team. managers make sure they have their best athletes on the field for the big game and this is not so in education. the teachers union has a say in who can be fired no matter what the performance is. in some cases a teacher accused of sexual assaulting a student is not fired. instead the union fights and drags the case out for months and years so these teachers are put in the so-called rubber room to wait it out while they continue getting pay and benefits. it prevents the school from hiring a new teacher. it is not about unions but how teachers teach or it should be. this is one of the most important challenges we face. there is no doubt our students are lagging behind their international counter parts.
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this must be fixed. take a look at the day on wall street. it was a quiet day down. dow jones down about 20 points. $13558. nasdaq gave up 20 points largely due to apple down about 1.5%. s&p down about 3.25 points. take a look at apple down 1 1/3% on the session. it sold 5 million iphones in three days. $690 on apple. google had a very good day. $749.38 up 2%. facebook had technology really seeing volume today. facebook down 9%. negative story crushed it finishing the day at $20.79 a share on facebook. thank you so much for being with me tonight.